Report Identifies Significant Growth in Bond Trading Amid Equity Concerns
Global equity markets may be in a state of panic, but fixed income volumes are skyrocketing, according to a white paper issued by Greenwich Associates. The research claims that global fixed-income volume by institutional customers reached $25.43 trillion in 2002, not counting derivatives or short-term instruments. According to the firm, it is no accident that the steep rise in bond activity in 2002 mirrors the sharp drop in equity markets worldwide. Robert Statius-Muller, a consultant at Greenwich Associates said: ‘Today’s market uncertainty has translated into greater demand for fixed-income products by the institutional community.’ The report found that the average institutional bond investor in 2002 traded well over 2001’s levels and well above typical year-to-year volume progressions. In some countries, trading volume nearly doubled and only in Japan did it remain constant. The highest increase was in the US, where a matched sample of 827 institutions traded on average $9.2 billion in 2002, up 39 per cent from 2001.